Provide important public services like education and health (merit goods)

Debt interest payments.

Transport

Military spending

UK public sector spending 2014-15

In the UK, the biggest department for public money is social security. This takes almost a quarter of all public spending. It goes on financing a variety of benefits (State pensions, public sector pensions, housing benefits, income support, disability/incapacity benefits, unemployment benefits).

EU spending is £14.7bn (2014). Net spending £9.9bn. See more at the cost of EU

The largest area of government spending?

By far the largest area of government spending is social protection. £222bn (2015) 34% of government spending. However, this budget can be split up into different compartments. The biggest single item of government spending is public pensions, with NHS spending in 2nd place.

What percentage of UK spending is on the EU?

If you take gross payments (ignoring EU payments to the UK), in 2014 – £14.7 billion was transferred from the UK to the EU in official payments. This is 2% of government spending.

If you take the £7.1bn net contribution, it works out at 0.9% of public sector spending or £110 per person per year. It is 0.4% of GDP.

Source for graph: Public expenditure, chapter 5 – though in that particular table, due to accounting reasons, they give confusingly figure of EU spending at £3bn, which is less than agreed measure, so I adapted these treasury figures to use £14.7bn to show cost of EU – which is widely agreed as correct figure. (Cost of EU)

Total Government Spending

Government Spending as % of GDP

In 2010, the government embarked on tough spending cuts to try and reduce the budget deficit. However, spending on debt interest payments rose to £48bn. Also, spending on welfare benefits rose because of the increase in unemployment. Overall the government plan to keep spending static in real terms (adjusted for inflation)

If our economy is doing as well as we are told or at least better than other member states then should we not be saving money instead of spending it, or am I being to simplistic. Running through contries finance should not be so difficult and what the government spends my hard earned tax dollars on shouldn’t be so gray but much more transparent and clear. The bottom line for me is I don’t want some Germany or in the future some Turkish polotitian design on what my money, my money is spent on.

What it shows is that pensions can’t be funded. I am 50 and my grandparents had a poor retirement. This generation of pensioners have seen a massive improvement. But at 50 years old I realise it’s a blip. It can not be funded. In seventeen years time there will be no money for my retirement. One generation will have spent it. That includes all the teachers, doctors, police etc who have had an early retirement. All generally funded by the state. If you live as long not working, as you did working then who is putting 50 percent of your income away to cover it. The National debit has funded a generation. Paying it off will take the next two generations.

As I have posted separately, Tax evasion looses billions every year, pensions and benefits payments are expressed in millions per year.

The wealth is being generated capable of paying for the masses of pensioners and unfortunates, but the lack of social concern and and opportunistic exploitation of tax system by some is winning at the moment.

From what I could find out about benefit fraud an tax evasion on this web site, tax evasion is by far the biggest issue. Government spend on pensions and benefits is expressed in millions, Tax evasion in billions, I’ll let you do the maths.

At the lowest marginal rate £1 above the free pay limit of £11,500-per annum the government gets 45.8p (20p tax 12p EE NI & 13.8p ER NI). Other taxes local authority, VAT, petrol, insurance, Air passenger duty, stamp duty, excise & import duties etc. & someone on a modest salary is at 65%-70% in taxes. A lot of the taxes are with borrowed money eg. Car loan, mortgage (stamp duty in loan) so people don’t fully see the impact of taxes. I the early 1970’s the government take was less than half of this, no VAT, flat rate NI stamp, deductions for mortgage interest, deduction for retirement annuity premiums etc. Whilst taxes have more than doubled pensions are lowest in OECD countries, health service is on a perpetual resuscitator, there is shortage of teachers etc. This is the direct result of a decades long government policy of EXPERIMENT & DESTROY.

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